Third Age Health Services posted a 17.9% revenue increase and 24.7% profit rise for FY26, driven by strategic acquisitions and expansion in aged residential care services.
- Revenue up 17.9% to NZD 22.49 million
- Statutory NPAT rises 24.7% to NZD 3.09 million
- Acquisitions of ARC Health and Cicada Health add EBITDA and regional reach
- Aged residential care revenue grows 27% despite margin pressure
- Final dividend declared at 4 cents per share, total FY26 dividends 16 cents
Profit and Revenue Surge on Acquisitions and Aged Care Expansion
Third Age Health Services (NZX:TAH) reported a solid uplift in full-year financials for FY26, with revenue climbing 17.9% to NZD 22.49 million and statutory net profit after tax (NPAT) rising 24.7% to NZD 3.09 million. The results reflect the company’s strategic acquisitions and a growing footprint in New Zealand’s aged residential care (ARC) sector.
Underlying net profit after tax and amortisation (NPATA) also jumped 25.9% to NZD 3.63 million, underscoring operational leverage despite ongoing workforce challenges. Earnings per share rose 24.8% to 28.38 cents, while the board declared a fully imputed final dividend of 4 cents per share, bringing total dividends for the year to 16 cents.
Acquisitions Bolster Regional Coverage and EBITDA
The company’s acquisitions of ARC Health Limited and Cicada Health Limited in September 2025 added significant scale and earnings. Together, these businesses contributed nearly NZD 1.9 million in revenue and NZD 717,000 in EBITDA for the seven months post-acquisition.
ARC Health, based in Canterbury, and Cicada Health, in Tauranga, fit neatly into Third Age Health’s ARC platform, supporting its national expansion strategy. The acquisitions were largely funded through working capital and credit facilities, with contingent deferred consideration arrangements in place, subject to performance metrics such as patient numbers and EBIT targets.
Aged Care Segment Drives Growth Amid Margin Pressure
The aged medical residential care segment delivered a 27% revenue increase to NZD 14.92 million and profit before tax rose to NZD 3.64 million. However, margins softened slightly as the company invested in securing clinical coverage and workforce development amid sector-wide staff shortages.
This deliberate margin compression reflects a trade-off favouring long-term service quality and operational resilience over short-term profitability. The enrolled patient population in ARC facilities grew 3.1% year-on-year, reaching 7,138 patients, contributing to the segment’s strong performance.
Community General Practice Faces Patient Attrition and Operational Challenges
In contrast, the general practice segment saw a modest revenue increase of 3.2% to NZD 7.57 million but suffered a 4.8% decline in patient enrolments to 19,383. This was largely due to doctor departures and clinical vacancies, which the company is actively addressing through leadership changes and recruitment efforts.
Operational challenges also emerged at smaller community practices, highlighted by the closure of the Belmont Medical Centre due to safety concerns and unsustainable security costs. The practice was merged with the larger Devonport facility, a move that caused some patient loss but improved staff safety and operational stability.
Balance Sheet and Cash Flow Reflect Acquisition Activity
Total assets increased to NZD 13.21 million, driven by higher intangible assets and goodwill from acquisitions. Net tangible assets per share remained negative at 5 cents, impacted by the intangible-heavy balance sheet and IFRS16 lease liabilities.
Operating cash flow improved to NZD 4.03 million, supporting dividend payments of NZD 1.59 million and debt repayments. The company’s borrowings and lease liabilities remained stable, with careful management of working capital and financing costs.
Outlook Focuses on Operational Discipline and Further Acquisitions
Third Age Health anticipates continued challenges from workforce shortages and cost pressures in FY27. The company plans to deepen operational discipline through its continuous improvement framework, the Third Age Way of Working (TAWoW), while investing in clinical teams and customer service.
Acquisition activity remains a priority, with the company targeting mission-critical services businesses that offer recurring revenue and strong free cash flow. While discussions with potential targets outside healthcare have not yet materialised, management remains focused on expanding its core aged care platform.
Bottom Line?
Third Age Health’s FY26 results show robust growth fuelled by acquisitions and aged care expansion, but persistent workforce shortages and margin pressures pose ongoing operational challenges.
Questions in the middle?
- How will Third Age Health manage margin compression amid ongoing clinical workforce shortages?
- What impact will the contingent deferred considerations on recent acquisitions have on future cash flows?
- Can the company stabilise and grow its general practice patient base after recent attrition and practice closures?